U.S. travel grew in July, but a slowdown may be coming

U.S. travel increased this summer, but growth is slowing even as a global travel boom continues.

That’s according to the latest data from the U.S. Travel Association (USTA).

Travel to and within the United States grew 3 percent in July from a year earlier, according to the USTA’s Travel Trends Index. And travel for the first seven months of this year has grown faster than the same period in 2017, said David Huether, vice president for research for the USTA.

Growth is credited mainly to increased domestic travel on the heels of higher consumer confidence. Business travel, in particular, is having its best year since 2010, Huether said.

However, domestic and international travel growth decelerated from June to July, a trend the USTA expects to continue over the next six months, though growth will remain positive. The association predicts domestic travel will grow an average of 2.4 percent through January.

Adam Sacks, president of the tourism economics group at research firm Oxford Economics, said “cooling consumer indicators and the potential for slower business investment growth” through the rest of this year could hurt domestic travel. Oxford prepares the Travel Trends Index for the USTA.

For example, new orders for durable goods, which can reflect future consumer and business demand, declined 1.7 percent in July, according to the U.S. Census Bureau. In addition, steep U.S. tariffs on many foreign products have risen fears about the long-term effect of the escalating trade wars on U.S. consumers and businesses.

Census July 2018 durable goods chart

As global economic growth moderates, the USTA predicts international travel will grow at an average rate of 1.6 percent through January. A longer-term concern, said USTA CEO Roger Dow, is that inbound international travel is not accelerating fast enough to boost the U.S. share of the global travel market, which peaked at 13.6 percent in 2015.

Case in point: In 2017, nearly 77 million people from other countries visited the United States, which was basically flat (+0.7 percent) from 2016, according to recent data from the International Trade Administration’s National Travel and Tourism Office. More visitors came from South Korea (+18 percent), Brazil (+11 percent), Argentina (+10 percent) and Ireland (+9 percent).

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